July 7 (Bloomberg) -- Apache Corp., the energy company that
has announced $9.8 billion of asset sales in the past year, is
seeking a buyer for its interests in the Wheatstone liquefied
natural gas project, people familiar with the matter said.

The oil and gas producer is in early discussions with
potential buyers for its holdings in Chevron Corp.’s A$29
billion ($27 billion) project in Western Australia, said the
people, who asked not to be identified as the matter is private.
Macquarie Group Ltd. and Goldman Sachs Group Inc. are advising
Houston-based Apache on the sale, they said.

In the past year, Apache has sold its Argentinian
operations, deep-water assets in the Gulf of Mexico and a stake
in its Egypt business as it seeks to reduce net debt, which
stood at $8 billion at the end of March, data compiled by
Bloomberg show. Its 13 percent stake in the Wheatstone project
could be valued at about $2.5 billion, according to UBS AG.

“A number of companies across the industry are starting to
pull back from some projects they previously had been pursuing
with a fair bit of vigor,” John Young, a Melbourne-based
analyst at Ord Minnett Ltd., said today by phone. “They could
perceive they have more attractive opportunities in the U.S.”

A sale of the Wheatstone stake would reduce Apache’s
capital spending commitments by $1.4 billion this year and $800
million in 2015, UBS analysts led by William Featherston wrote
in a report today. Proceeds could be used to fund further share
buybacks, according to the report.

Cost Overruns

Apache fell 1 percent to $99.05 at the close in New York.
The shares have gained 15 percent this year.

The Wheatstone plant will produce 8.9 million tons of LNG a
year and is due to start in 2016, according to its website.
Apache also holds a 65 percent interest in the Julimar and
Brunello offshore fields, which it operates and which will
provide gas to the Wheatstone facility.

Wheatstone is among seven LNG export developments being
built in Australia at a cost of about $190 billion to meet Asian
demand. High construction costs and a strong Australian dollar
have hurt project developers including BG Group Plc, with the
bill for Chevron’s Gorgon LNG project surging to $54 billion
from an estimate of $37 billion in 2009.

Chevron owns 64 percent of the Wheatstone project,
according to its Australian unit’s website. Kuwait Foreign
Petroleum Exploration Co., known as Kufpec, holds 13 percent
while a group of Japanese companies including Tokyo Electric
Power Co., known as Tepco, jointly hold an 8 percent interest.

Chinese energy companies may be interested in buying
Apache’s Wheatstone holdings, Nik Burns, a Melbourne-based
analyst at UBS, said today by phone. Kufpec may also consider
buying the stake, he said.

Shell Sale

Royal Dutch Shell Plc agreed in January to sell its 6.4
percent stake in the Wheatstone project and an 8 percent stake
in the Wheatstone-Iago gas fields for $1.14 billion to Kufpec.
The Wheatstone facility will supply fuel to customers in Asia
such as Tepco, Chubu Electric Power Co. and Tohoku Electric
Power Co.

David Parker, a Perth-based spokesman for Apache, referred
to comments Chief Executive Officer Steven Farris made in a May
28 presentation. Farris said at the time Apache was “trying to
monetize” Wheatstone, according to a transcript. Parker
declined to comment further.